Fuel and Paying at the pump - how it all works.

 

Paying at the pump has struggled to keep pace with today’s payment options. Several factors have led to the current state. One of the issues arises with legacy pumps, fuel pumps are expensive to replace and pump manufacturers early designs did not anticipate how paying at the pump would evolve. In the early days, back office systems where modified to handle a new set of requirements allowing customers to pay at the pump. The bulk of the back office process landed at the credit card issuer’s door step.

Before we get to the back office process lets walk through the basics and history of a credit card fuel transaction.

A customer swipes a card at the pump.

The pump generates a pre-auth transaction and sends it out for approval.

A quick historical overview.

The pre-auth amount for $1.00 is sent from the legacy pump, upon approval the pump is activated to dispense fuel. Just a few years ago, Visa and MasterCard guaranteed funds up to $50, when the price of fuel and the size of our vehicles’ gas tanks increased, an issue surfaced. If a customer purchased more than Visa and MasterCard $50 guarantee, some card issuers automatically generated a chargeback. Fuel retailers acted quickly and set pumps to shut off at $50, forcing customers to swipe the card a second time to top off the tank. In the cases where a second transaction occurred processing fees doubled. Fuel retailers united and lobbied to increase Visa and MasterCard guarantee amount to $75 with success.

Once the pre-auth amount is approved, the pump is activated.

The customer fills up their tank.

Upon completion, a pre-auth completion transaction is generated for the amount due.

The pre-auth completion transaction adjusts the pre-auth transaction (to the amount of the sale) and the final amount is settled to the card holders’ account.

The receipt is printed, and the transaction is compete.

 

Now, back to the back office process.

When a pre-auth transaction occurs, funds on a card holder account are put on hold. In the early days communication networks were not the most reliable and often fuel pre-auth transactions were not cleared in a timely fashion causing issues with card holder’s accounts. Making changes to legacy fuel pumps such as adjusting the pre-auth amount was an expensive under taking as a qualified technician had to physically touch every pump.

Facing several barriers to success, something had to be done. In steps the card issuer, not wanting customers to be impacted with a hold on funds and looking for a quick fix to help fuel retailers manage pumps, they created a new process.

A back office process was developed to convert all credit card pre-auth transactions originated with a fuel pump SIC code to a back office hold of $1.00 while securing Visa and MasterCard guaranteed amounts. This way credit card issuers could effectively manage the card holders open to buy, and free up unnecessary fuel pre-auth holds and eliminate the need to reconfigure fuel pump pre-auth amounts. Over time credit card processors converted fuel pump SIC code transactions to $1.00 regardless of the amount sent up by the pump. This worked for many years, until new payment types at the pump surfaced.

With new payment instruments, new transaction flows surfaced, Debit and gift cards introduced partial approval transactions. Again, legacy systems are not designed to handle partial approval transactions and thus settlement issues may arise.

To minimize risks in fuel transactions, take a few minutes and verify the following before you accept partial payments at the pump.

(By the way Visa and MasterCard credit cards are now allowing partial payment on credit and check cards.)

 

 Check with your processor and discuss credit and gift card partial approvals for fuel.

Typically they require a partial approval indicator in the pre-auth message.

If the indicator is turned on they will return the partial approved amount.

Validate what transaction types your pump can handle, contact the manufacturer of the pump to be sure.

Make sure they can set the pump shut off based on the amount returned in the partial approval.

Verify your payment system software can handle the new transaction.

If you have a host or in-store system which consolidates and reformats transaction messages, you really need to dig deep on this one.

 

The good news is if you have partial approval turned off, all VISA and MasterCard gift card transactions with a balance below $75 will be declined. Thus chances for miss-handled transactions are reduced.

 

Debit card transactions have managed partial authorizations from day one. Debit card transactions required hardware upgrades at the pumps to support PIN’s, thus implementing a new process was required and the cost of doing so was justified. A key change in the process as debit cards had to support customers who did not have funds to cover the $75 pre auth amount. A process to activate the pump for the pre-auth partial approval amount was developed.

 

For example this change allowed a customer with only $30.00 in a debit account to buy up to $30.00 in fuel, as the pump is activated for the returned balance from the pre-auth transaction.

 

Unfortunately up until now credit card transactions have not adapted debit card logic and thus we need to continue to educate ourselves as new processes evolve to handle new payment options.

 

 

What to know how to configure WinEPS? Keep reading!

First check with your processor and ensure they support the fuel pre-auth amount, also ask them if they send back a partial approval for the pre-authorization if the card balance is less than the requested pre-authorization amount.

Second, configure the WinEPS server as follows:

Launch WinEPS Configuration Manager

Step 1: Select Configuration from the top pull down Menu, select card processing profiles. Select the Card Processing profile used by your Fuel pump Lanes. Note : with WinEPS each lane can be configured to handle unique processing rules, based on lane type and business practices. To change a lanes Card processing profile, see the Lane Definition process below.

Step 2: Click on the Change button.

Step 3: Select Visa and change pre-auth amount from $1.00 to $75.00. As the change is made you will notice the amount to return to the pump will disappear from the screen. Now the balance returned in the pre-auth approval will be returned to the pump, ensuring the customer will not exceed the gift card balance. Check all card types such as MasterCard and Discover and make the change above if pre-auth is set to $1.00. When complete click on the save button. See Below. If you have any questions please call the MTXEPS help desk as an error here can create a myriad of issues.

 

The most important aspect in setting up WinEPS for pay at the pump is proper Lane definition. It may be worth your time to double check your Lane definition.

First, launch WinEPS viewer.

Select Site Information from the top Menu and select Lane Definition.

Review Lanes with Gas Unattended as the Lane Type. If all lanes are defined as Normal and you have fuel pumps you have a configuration issue. See Below

 

 

Ensure all Gas Unattended Lane types are configured to use a Terminal Type of “11 – ISO (Socket per Lane)” which is the default for fuel lanes. When you select the Lane Type of Gas Unattended the Configuration type should update automatically to “Fuel Configuration.”  If a Fuel lane is improperly configured select the Lane and click on the change button. Make the changes and click save; after saving the changes you need to stop and start the WinEPS engine to implement the new settings.

 

Proper Configuration, Lane Number overlap

Another area of confusion occurs when your Fuel Pump Lane's, Lane numbers overlap with In-Store Lanes. For example in store Lanes are 1, 2, 3 and Fuel Pump Lanes are 1, 2, and 3.  To address this issue WinEPS provides a Pump offset number which is added to the pump’s lane number in order to separate fuel lanes from non-fuel lanes. For example, Fuel lanes number 1, 2, 3 become 51, 52, and 53 when you change miscellaneous settings, Number to Add to Fuel pump to 50. All reports and system information use the new lane number once configured.

 

To do this First Select Configuration from the Top Menu, select Terminal Configuration, select Fuel Lanes. The following screen will appear.